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Australia faces a bleak future unless energy is found to renew the country’s manufacturing base in the wake of the car industry’s departure, economists and industry groups have warned.

”We have got a choice: if we do not chase new markets, then the alternative is that we are going to have to cut wages,” said economics and policy expert John Freebairn at Melbourne University.

The comments follow Toyota’s announcement it would cease manufacturing in Australia in 2017. It means the end of car making in the country after Ford and Holden also said they would stop building cars here by 2017.

Up to 50,000 jobs are now likely to go across the car making and components sector in the next three years.

Professor Freebairn said the high-wages Australian economy was going through enormous structural changes.

”Unless you are in high-technology, innovative products, you are not going to survive. If you are in low-technology, labour-intensive products, imports are going to knock you over every time,” he said.

He said car component makers had been very innovative in the products they made, using newer materials that were lighter and less prone to wear and tear. He said there were many similar scientific and medical equipment success stories in Australia.

The federal and state governments needed to better support firms to establish new products and production systems, he said. ”My guess is that the components industry is not just going to fold up quickly; some of those guys may actually innovate and survive.”

He also called on the Abbott government to end the 5 per cent tariff on imported cars, which was there to protect the domestic industry. ”The rationale … after 2017 is zero.”

Roy Green, dean of the University of Technology Sydney business school, also warned that Australia could end up ”a country that simply exports unprocessed raw materials, with supplementary activity by banks and related services, and with restaurants and hairdressers that sell services to each other”.

He said if this were the case, Australia’s First-World living standards ”will not be sustainable – we would be heading down the Argentina road”. Professor Green called on the federal government and states to tackle the issue ”in a coherent way”.

”We can identify areas where we have a comparative advantage, such as natural resources and also a competitive advantage, which is the processing of those materials or food, for example,” he said.

He said Australia also had a competitive advantage because of its high levels of education, its ”ingenuity” and its research and development knowledge base. ”The energy is here, but we need to find it within ourselves, and we tend to find it in times of adversity – not in times of bounty like the recent commodity boom where we lulled ourselves into a sense of complacency.”

Australian Industry Group chief executive Innes Willox also said the nation needed to look at ”where we have competitive advantage, and what are the cutting-edge technologies we need to develop”.

This story Administrator ready to work first appeared on Nanjing Night Net.